Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/263900 
Year of Publication: 
2022
Series/Report no.: 
Working Paper No. 012.2022
Publisher: 
Fondazione Eni Enrico Mattei (FEEM), Milano
Abstract: 
Most literature in strategic network formation shows that there is a substantial tension between stability and efficiency. In this note, I show that such is not the case in the twoway flow model with small decay studied by Bala and Goyal (2000a) and De Jaegher and Kamphorst (2015). Specifically, I show that every link receiver in a Nash network serves as an efficient trans-mitter of information. I also generalize this result to the case of player hetero-geneity and then provide a fine-detail characterization of effiicient networks.
Subjects: 
Network Formation
Nash Network
Two-way Flow Network
Agent Heterogeneity
Efficient Network
JEL: 
C72
D85
Document Type: 
Working Paper

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